PCG Press For Tax Reform

The Managing Director of the Professional Contractors Group, John Brazier, said “We are obviously in uncharted waters.  However, the Professional Contractors Group has established a good working relationship with both the Conservatives and the Liberal Democrats in Opposition, and we are confident this will continue in Government.  Both parties have expressed the need for change with regards to IR35, and both parties value the flexible, skilled workforce PCG members provide.”

The two big contractor related points sure to be on the agenda are:

  1. The reversal of the IR35 Legislation, AND
  2. The implementation of the Agency Workers Directive (AWD)

What is the Agency Workers Directive?

The Agency Workers Directive is a piece of legislation designed to protect the rights of low paid agency workers.

Designed by the European Community, the legislation gives agency workers the same pay, terms and conditions of employment, maternity / paternity benefits as workers who are permanent employees of a client company. These employment rights are either given:

  • As soon as the agency worker starts working for the client, OR
  • After a certain length of time known as the ‘derogation period’ (agreed to be 12 weeks by the CBI, TUC and the Government).

How will the Agency Workers Directive affect Highly Skilled Contractors?

Obviously the AWD has been a big concern for many highly skilled contractors who benefit significantly from their independence and are not interested in gaining the same employment rights as perm employees after 12 weeks. Thankfully at least, when the draft regulations were released they excluded those:

  • Working as Self Employed
  • Operating a Contractor Limited Company
  • Employed on Managed Service Contracts

Therefore, at present, when the Agency Workers Directive comes into place those operating a Contractor Limited Company outside the scope of IR35 will not be affected by the legislation. However, those individuals using an Umbrella Company will gain the same employment rights as perm workers after 12 weeks. This could spell the end of Umbrella Companies as we know them as contractors would be unable to claim business expenses associated with a temporary workplace unless all assignments were for less than 12 weeks each.

Commonwealth Contractors

Commonwealth Contractors is a collection of highly skilled professionals from the Commonwealth and beyond. We partner with OISC Registered Immigration Partners capable of professionally representing Tier 1 Visa Applications / Extensions AND Tier 2 Licensed Consultancy & Associated Trust Partners who may be prepared, where required, to sponsor a Medical, Information Technology or Engineering Professional on a Tier 2 Visa (formerly UK Work Permit).

To find out more call Commonwealth Contractors now on 0330 390 9021or Submit your details now and we will get right back to you. Please be prepared to send a copy of a recent CV so that we can pass to interested partners.


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